European cash equity markets are mixed ahead of the midway stage with moves in either direction on the small side (FTSE +0.1%, DAX 0.0%, CAC +0.3%). Auto related stocks are among the worst performers having turned lower in recent trade amid reports via German press that the US are considering three options for car tariffs including a ten-percent levy. Swedish builder Skanska has also moved sharply lower after their fourth-quarter update where they surprised investors with a proposed dividend cut. Broader risk sentiment has also been dampened by concerns regarding global trade after US President Trump said he had no plans to meet with Chinese President Xi before March 1st – There were hopes that such a meeting would postpone the imposition of additional US tariffs on Chinese goods. In the bond markets, both Bunds and Gilts are hovering relatively close to unchanged for the day with little event risk this morning to dictate otherwise. The German trade surplus did widen slightly in December to €19.4 Bln (f/c. €19.0 Bln) while French industrial production was in line with expectations. Turning to currencies, again moves have been relatively muted with the Dollar Index flat at 96.6. The Australian Dollar has seen some minor underperformance following more dovish RBA rhetoric overnight. Oil prices are mixed meanwhile with US crude futures down -0.3% and Brent up +0.3%. Spot gold has added +0.1%. Looking ahead, futures are pointing to slightly lower open on Wall Street with earnings still to come from Phillips 66 and Goodyear. On the data front, we await US wholesale inventories plus Canadian jobs data and housing starts.
Key Headlines/Data:
* European Corporate News:
– Deutsche Bank (-0.7%) | Commerzbank (+1.2%): WiWo – Germany seeks Deutsche Bank/Commerbank decision before EU elections
– Skanska (-6.8%): Operating Profit 2.4 Bln versus 2.6 Bln expected | Proposed dividend cut
– L’Oreal (+0.3%): Q4 Operating Profit rose 5.3% to €4.7 Bln | Q4 sales beat
– Hermes (+1.5%): Q4 Revenue rose 10% to €1.65 Bln
– Travis Perkins (+1.7%): Raised to ‘outperform’ from ‘sector-perform’ at RBC
– Bankia (+1.0%): Raised to ‘neutral’ from ‘underperform’ at Credit Suisse
– Thales (+1.4%): Raised to ‘buy’ from ‘neutral’ at Citi
* No talks between Trump and China’s Xi before trade deadline (Reuters):
– U.S. President Donald Trump said on Thursday he did not plan to meet with Chinese President Xi Jinping before a March 1 deadline set by the two countries to achieve a trade deal.
* Jeremy Corbyn’s Brexit plan ‘promising’, Donald Tusk tells Theresa May (Sky News):
– The EU’s Donald Tusk has told Theresa May that Jeremy Corbyn’s Brexit plan offers a “promising way out” of the current Brexit stalemate, according to Sky sources.
* French Non-Farm Payrolls Q/Q (Q4) +0.1%, previous +0.1%
* Swiss Unemployment Rate (Jan) 2.4% versus 2.4% expected, previous 2.4%
* German Trade Balance (Dec) €19.4 Bln versus €18.4 Bln expected, previous €19.0 Bln:
– Exports M/M +1.5% versus +0.2% expected , previous -0.4%
– Imports M/M +1.2% versus +0.2% expected, previous -1.6%
* Norwegian GDP Q/Q (Q4) +0.5% versus +0.6% expected, previous +0.6%
– Mainland GDP Q/Q +0.9% versus +0.7% expected, previous +0.3% revised to +0.4%
* French Industrial Production (Dec):
– Industrial Production M/M +0.8% versus +0.8% expected, previous -1.3% revised to -1.5%
– Industrial Production Y/Y -1.4% versus -1.4% expected, previous -2.2% revised to -2.1%
* Italian Industrial Production (Dec):
– Industrial Production M/M -0.8% versus +0.4% expected, previous -1.6% revised to -1.7%
– Industrial Production Y/Y -5.5% versus -3.0% expected, previous -2.6%
* Germany’s WirtschaftsWoche said the US are considering three options for car tariffs, including a 10% levy
* Spokeswoman for UK PM May said her dinner with the Irish PM to build on Brussels talks and seek legally binding changes to the withdrawal agreement.
